Is the Manhattan commercial market beginning to favor its tenants? The 2016 Savills Studley Effective Rent Index (SERI) report reveals a growth in concession packages, or perks offered by landlords, specifically in Midtown and Downtown Manhattan, where rental rates are relatively flat. “We are witnessing the early and tentative stages of transition from a landlord’s market to a tenant’s market, particularly in Midtown,” director of U.S. Analytics at Savills Studley Keith DeCoster said. “Rents are always sticky, and what is true of one building doesn’t necessarily hold true for the next one. But with little indication that demand is going to intensify in the short-term and availability rising, conditions are likely to tilt a bit more in tenants’ favor in the coming quarters.” With softening demand in the historically hot submarkets, class A landlords in Downtown granted concessions at values of $102 per square foot in 2015. In 2011, concessions were valued at $...
- Class A landlords in Downtown granted concessions at values of $102 per square foot in 2015.
- Midtown concessions grew by 0.4 percent and reached record values of $138.50 per square foot.
- According to the SERI report, these compromises are a response to the growing supply of space and lack of upward price movement.
- Leasing activity Downtown dropped from 4.5 million square feet in 2014 to 2.4 million square feet in 2015.